You know, proper market reading is basically the whole game in trading. I’ve noticed many times how people go against the main trend and then wonder why they’re losing money. Let’s figure out what’s really happening with prices and how to use it.

A trend is simply the prevailing direction in which the price moves. It sounds simple, but there are nuances. Prices never move in a straight line; they form patterns that show us which way the market wind is blowing.

There are three main scenarios. First, an uptrend — when prices consistently make higher highs and higher lows. This signals that buyers are in control. Second, a downtrend — when everything is the opposite — highs and lows are getting lower. Here, sellers hold the initiative. And the third option is sideways movement, when the price just jumps back and forth at the same levels without a clear direction. This usually precedes something bigger.

Now, the interesting part — reversals. A trend can’t last forever. At some point, it breaks. What should you look for? First, a loss of structure. If there was an uptrend, but suddenly the price starts making lower highs — that’s a red flag. Second, breaking important support or resistance levels. If this happens with high volume, it’s serious. It’s not just noise but a real change.

A pivot is one of my favorite tools for confirming a reversal. It’s when the price makes three moves in a row: a low, a high, then a higher low, and then breaks the previous high. This is an upward pivot and signals an upward reversal. With a downward pivot, everything is mirrored. Traders use this for entry and exit points.

A trendline is another basic tool I constantly draw on charts. It’s simply a line connecting important points — either rising lows for an uptrend or falling highs for a downtrend. The more times the price respects this line, the more significant it is. When an upward trendline is broken, it can indicate weakness. The same applies to a downward trendline, just in reverse.

And then there are fractals — these are more tricky. A fractal is just a repeating pattern on different timeframes. I often see people looking only at the hourly chart and spotting an upward pivot, but forgetting to check the daily chart, where the main movement is a downtrend, and the hourly chart is just a correction within a larger decline. So always look at multiple timeframes.

An upward fractal is a peak surrounded by two lower candles, indicating a possible reversal downward. A downward fractal is a bottom surrounded by two higher candles, signaling support and a possible reversal upward.

When does a downtrend end? Watch for breaking an important line, the appearance of an upward pivot, increased buying volume, chart patterns like double bottoms. All of this together is a serious signal.